WPP's ratings are supported by a leading industry position, strong portfolio of
advertising, measurement, market research and brand management businesses, sound
financial metrics and a well-communicated corporate strategy.

Following the Publicis Omnicon merger (which is expected to close some time in
2014) WPP will rank as the industry's second largest global advertising holding
company (GHC), with WPP exhibiting strong company specific traits along with
measured financial policies. Notwithstanding a recently announced increase in
targeted share buybacks, Fitch expects that shareholder distributions and
acquisitions will be managed within the company's stated leverage (average net
debt to EBITDA) policy of 1.5x to 2x.

KEY RATING DRIVERS

Scale, Breadth and Diversity

As one of the industry's largest GHCs, WPP's ratings are supported by its scale,
breadth of business and geographical diversity. The company has a balanced mix
of creative (advertising and media investment) and so called non-creative (brand
management, consultancy, market research and measurement) businesses. The
company understands the need to invest (acquire) businesses in faster-growing
markets and quickly evolving media platforms while at the same time being able
to provide global advertising customers solutions across a complex mix of
businesses and disciplines.

Growth of Digital

The company has built a strong position in digital media both through
acquisition and organic investment - an important strategy for any GHC in light
of the importance of, and growth expectations, for online advertising. In 2013
new media accounted for 35% of WPP's overall sales and the company has a
medium-term target of 40%-45% revenues. The rapidly changing world of social
media, the speed with which mobile advertising is increasing, the degree to
which these platforms are driving audience fragmentation, contextual advertising
and the potential to dis-intermediate traditional advertising formats all
underline their strategic importance for GHCs.

Emerging Markets

Equally significant is an established presence and focus on emerging markets, in
light of the maturity of western European (36% of 2013 sales) and North American
(34%) markets. The company raised its target for revenue in its faster-growing
markets in 2011 to 40%-45% of group sales from 30% in FY13. A growing middle
class and increasing consumption trends in these markets underline the
importance of WPP's ability to offer a complete set of solutions for
multinational and domestically based clients alike by combining the scale
economies of a global agency with requisite local knowledge. While the increased
exposure to emerging markets gives rise to FX-related volatility and potentially
more acute cyclical effects, Fitch acknowledges the stronger underlying margin
and long term growth potential of these markets.

FX Risk

WPP's 4Q13 results were impacted by unfavourable FX movements. These movements
affected the company's revenues, but also its margin as WPP's emerging markets
operations earn a higher margin than operations in more developed countries. WPP
funds itself in USD, GBP and euro-denominated debt. Unless they reverse, the
adverse currency movements witnessed towards end-2013 will act as a headwind for
the company in 2014. While Fitch's rating case assumes underlying growth of 3%
or more in 2014, with a further 2% to 3% of growth provided by bolt-on
acquisitions, we envisage these effects will be largely offset by negative FX -
the impact of which will be felt most strongly through the first nine months of
the year.

Slower Margin Improvements

WPP has lowered its expectations for margin improvement to 30 bps per annum from
50 bps. in 2014. Adverse FX movements have affected reported margins; guidance
is, however, provided on a pre-FX basis, with the company indicating increased
pressure from clients and competition slowing the improvement of its organic
operating margin. Margin performance is nonetheless healthy and compares well
with peers. Reduced expectations for further margin improvement do not currently
impact WPP's rating.

Shareholder Distributions & M&A

Management has identified M&A, dividends and buybacks as its priority uses of
free cash flow while managing its balance sheet within its target leverage. The
company has increased its share buyback target for 2014 to 2%-3% of outstanding
shares from 1%, and its target dividend pay-out ratio to 45% from 40%. The
budget for new acquisitions remains at GBP300m-GBP400m in 2014, with the
company, in Fitch's view, showing a disciplined approach to financial policy in
recent years. The business generates healthy levels of free cash flow and
Fitch's rating case assumes that distributions and M&A will be managed within
its stated leverage (average net debt / EBITDA) range of 1.5x to 2x.

RATING SENSITIVITIES

Negative: Future developments that could lead to negative rating actions
include:

-Events leading to average net debt/EBITDA trending consistently and materially
above 2x

-A weakened operating profile or a change in financial policy, more so than M&A
or cyclically driven trends, which would put pressure on the ratings
Positive: Future developments that could lead to positive rating actions
include:

-Notwithstanding a strong industry position, diversification and a flexible cost
base, the company's financial policy - balancing the need to invest in
acquisitions, a progressive distribution policy and a measured leverage profile